Binance Slams Report Alleging It Commingled Customer Funds With Its Revenue, Calls It ‘Weak’

Binance, the world’s largest centralized cryptocurrency exchange platform by trading volume, slammed the supposed explosive expose which alleged it commingled customer funds with company revenue, calling it a “conspiracy theory” and labeling the journalist behind the report as “desperate.”

Binance did not mince words when it responded to a Reuters special report from Tuesday.

“Binance, commingled customer funds with company revenue in 2020 and 2021, in breach of U.S. financial rules that require customer money to be kept separate,” the report revealed, citing three sources familiar with the matter.

“The sums ran into billions of dollars and commingling happened almost daily in accounts the exchange held at U.S. lender Silvergate Bank,” it disclosed, noting that the information came from a person with direct knowledge of Binance’s group finances.

The special report further said, “Binance mixed $20 million from a corporate account with $15 million from an account that received customer money,” based on a February 10, 2021, bank record.

Commingling or the act of mixing company and customers’ funds has become a hot topic within the cryptocurrency industry since the collapse of the crypto giant FTX last November, which triggered doubts and speculations that the dreaded practice coil be widespread in the nascent space.

Binance did not take the report sitting down and fiercely fired back by calling the special report “weak,” full of “conspiracy theories” and “desperate.”

Patrick Hillmann, the exchange’s chief communications officer said, “This story is so weak that they had to put up front, ‘Reuters found no evidence that Binance client monies were lost or taken’ in a transparent attempt to protect themselves from a libel suit.”

“Underneath that, they then pinned 1000 words of conspiracy theories (which we explained were false) with zero evidence other than a ‘former insider,'” he added.

Hillmann also explained that Binance keeps “our user and corporate funds on completely separate ledgers… We know who their sources are and @Reuters will be embarrassed when it becomes public.”.

The executive also attacked the report for its subtle hint of xenophobia as it “consistently” mentioned the ethnicity of Binance’s CEO Changpeng Zhao (CZ) but failed to disclose that the crypto kingpin became a Canadian citizen when he was 12 years old.

“Also, the xenophobia behind consistently mentioning @cz_binance’s ethnicity without noting that he’s been Canadian since the age of 12 is about as subtle as a hammer wrapped in a pillowcase,” Hillmann tweeted.

It is worth mentioning that this is not the first time Binance has faced allegations of mixing funds.

In January, Bloomberg reported that the exchange inadvertently kept collateral for some crypto assets it issued in the same wallets as funds that belonged to customers.

“Collateral assets have previously been moved into this wallet in error and referenced accordingly on the B-Token Proof of Collateral page,” a Binance spokesperson told Bloomberg earlier this year.

“Binance is aware of this mistake and is in the process of transferring these assets to dedicated collateral wallets.” Assets held with the exchange “have been and continue to be backed 1:1,” the spokesperson assured.

This is not also the first instance that Binance slammed a Reuters report. The exchange torched the news site earlier this month on its report about seized Binance accounts, noting that it left out critical facts to “fit their narrative.”